Housing Transition Team Advises Murphy: First, Acknowledge the Crisis

Report lays out six priorities to increase housing stock and end foreclosures, does not call for COAH to be resurrected

Gov. Phil Murphy’s Housing Transition Advisory Committee recommends that he acknowledge New Jersey has a housing crisis and set six priorities for increasing New Jersey’s housing stock and keeping people in their homes, none of which includes a reconstitution of the state Council on Affordable Housing.

The report is one of 14 issued by the Murphy administration, after it created numerous transition committees seeking their recommendations. The transition committees were made up of stakeholders in the particular areas — nonprofits, citizen advocates, business interests, and so forth. The report takes on key issues facing the Garden State, including affordable housing and foreclosures.

The first and overarching recommendation of the housing committee’s 14-page report, which advocates praised, is that Murphy reinstate the position of senior deputy commissioner of housing in the Department of Community Affairs and the Statewide Commission on Housing, which were created by the Fair Housing Act of 2008 but never constituted by the Christie administration. These would be dedicated to better addressing the state’s housing needs.

No comeback for COAH

But since it did not call for resurrecting COAH, the report seems to hammer the last nail into the coffin of the former agency that was hated by Democrats and Republicans alike. Instead, the report urges the continuance of the current process, in which judges are approving municipal affordable-housing obligations. The Statewide Housing Commission is eventually expected to recommend a new administrative method for overseeing how to set affordable housing goals and see that towns comply with their constitutional mandate to provide a share of the statewide need for homes for those of low and moderate incomes.

“Once the court process is complete, the next iteration of an administrative agent must be in place,” the report states. “This will provide time for the commission to explore the optimal administrative agent and process to govern municipal fair-share requirements in New Jersey.”

Michael Cerra, assistant executive director of the New Jersey State League of Municipalities, said not recommending a replacement for the current court process, which he termed “dysfunctional, costly, ineffective and inefficient” for towns, is the report’s greatest missed opportunity.

“The state has vacated the playing field, both the Legislature and the previous administration,” Cerra said of inaction on affordable-housing rules. “This was certainly an opportunity to contemplate how administrative functions could re-engage, but instead it downplays and punts on that issue.”

Construction already underway

The Fair Share Housing Center, which has been a party to these court cases and settlements and whose executive director was a member of the transition committee, disagrees. Spokesman Anthony Campisi said that 180 municipalities have agreed to zone for 60,000 homes through the process and that construction already has begun on some projects.

“Shovels are in the ground in many of these communities,” Campisi said. “To stop the process now would cause delay. The courts are giving us real results. The report concludes this process should continue. As to what’s next, we’d like to be included in any of these conversations.”

Municipalities have been obliged to provide for their share of the regional need for affordable housing for decades, following the state Supreme Court’s first and subsequent decisions that are known collectively as the Mount Laurel doctrine after the Burlington County township whose exclusionary zoning sparked the first cases. New Jersey’s Fair Housing Act established a mechanism for doing that and COAH to oversee that. But the Supreme Court took the responsibility away from the council after it failed numerous times to adopt satisfactory rules.

The report urges the creation of an overarching housing policy to most efficiently breach the barriers to improving affordability, which federal tax changes will only exacerbate.

Housing in crisis

It agrees with other reports released last year that termed New Jersey’s housing situation in crisis. About four in 10 households here struggle to pay housing and other costs and the state needs 150,000 new affordable homes immediately and a way to ensure the ongoing production of more units, according to the report.

“This housing crisis undermines the governor’s goal of a stronger and fairer economy and contributes to the exodus of families, millennials, and seniors,” it states. “In the past eight years, this housing crisis has not been a State priority. In fact, funds to support the development and preservation of affordable homes have been re-allocated to the general treasury, exacerbating the housing problem. This has led to disjointed programs scattered across multiple departmental divisions attempting to fill gaps.”

A more robust state housing program should identify funding sources, streamline programs, consolidate funding opportunities in the New Jersey Housing and Mortgage Finance Agency, and work with local public-housing authorities both on creating more affordable housing and preventing people from losing their homes through foreclosure.

Incentivizing the production of housing is another priority the report recommends. It suggests tripling the Neighborhood Revitalization Tax Credit cap from $10 million to $30 million as a way to get businesses to invest in housing, commercial and mixed-use projects. According to the Housing and Community Development Network of New Jersey, the program has so far leveraged $9 from private and public sources for every $1 tax credit given and it has resulted in the construction of more than 1,200 homes and 350,000 square feet of commercial space.

The state should also use grants from the Economic Development Authority to support moderate-income housing construction and reorganize the NJHMFA to make it a “one-stop shop” for housing programs.

With the highest foreclosure rate in the nation, New Jersey should aggressively work to keep people from losing their homes, the report states. It recommends Murphy start by reversing several Christie positions that prevented the state from effectively battling the problem. For instance, it suggests Murphy take action to work with local organizations to turn foreclosed homes into affordable housing — Christie vetoed a bill that sought to do that three times. It also seeks the codification of a mediation program to help homeowners avoid foreclosure and suggests that it be funded by a temporary $800 surcharge on each foreclosure complaint filed in the state, to be paid by the lender.

To help pay for foreclosure programs, and perhaps other housing programs, New Jersey should be aggressive in pursuing all federal settlements with financial institutions resulting from their roles in foreclosure actions, which the report estimates could total as much as $600 million for the state that has not been pursued.

Other areas the report states should be priorities are:

Reduce barriers to creating housing by streamlining approvals for inclusionary developments, remove other barriers to construction and providing greater planning support to municipalities.

Provide legal assistance to those facing eviction or foreclosure by implementing a pilot program to give representation to those threatened with a loss of their homes and to enforce anti-discrimination laws.

End homelessness by restructuring programs that help the homeless, making it a priority to provide permanent, supportive housing to all in need, increasing fees to fund county or a statewide Homeless Trust Fund to pay for shelters, and banning the blacklisting of tenants who had a prior housing court appearance.

Housing advocates like Staci Berger, the president of HCDNNJ, were pleased with the simple idea of a governor who is serious about housing issues but they also support the report’s recommendations.

“We are looking forward to working with the administration to accomplish the priorities presented in the report to making New Jersey a place everyone can afford to call home by addressing foreclosure and homelessness prevention, tenants’ rights, expanding the Neighborhood Revitalization Tax Credit Program, and of course creating more affordable choices for all residents,” Berger said.